HOPPS Lab Test Packaging Policy Anything but Clear
A new policy on packaging of laboratory tests provided to hospital outpatients is creating confusion among laboratories as directives from the Centers for Medicare and Medicaid Services (CMS) explain the new policy using different terms. Under the new packaging policy, which went into effect Jan. 1, 2014, certain clinical laboratory tests are to be packaged […]
A new policy on packaging of laboratory tests provided to hospital outpatients is creating confusion among laboratories as directives from the Centers for Medicare and Medicaid Services (CMS) explain the new policy using different terms. Under the new packaging policy, which went into effect Jan. 1, 2014, certain clinical laboratory tests are to be packaged (or bundled) into the payment for the primary service performed in a hospital outpatient setting. According to the final Hospital Outpatient Prospective Payment System (HOPPS) rule issued last December, the Centers for Medicare and Medicaid Services (CMS) will package laboratory tests “when they are integral, ancillary, supportive, dependent, or adjunctive to a primary service or services provided in the hospital outpatient setting.” To be packaged, the lab tests would have to be provided on the same date of service as the primary service and ordered by the same practitioner who ordered the primary service. Molecular pathology tests are exempt from this packaging policy. CMS issued instructions to contractors on Dec. 27, 2013, and followed it with an MLN Matters (MLN) shortly thereafter. The problem, says Robert Mazer, an attorney with Ober|Kaler (Baltimore) is that there are inconsistencies in the instructions regarding which laboratory services have to be packaged by the hospital and which services can be billed individually under the Clinical Laboratory Fee Schedule. In addition, neither adequately explains when a laboratory test must be billed by the hospital, particularly when the test is performed by a lab that is not part of the hospital. Instructions to Contractors According to MLN article SE1412, effective Jan. 1, 2014, packaged payment would apply to all lab tests (other than molecular pathology) billed by OPPS hospitals on a 013X type of bill (TOB; hospital outpatient). Initially, CMS said that in limited exceptions, hospitals could use the 014X TOB (hospital nonpatient) to obtain separate payment in only the following circumstances:
- Nonpatient (referred) specimen;
- A hospital collects specimen and furnishes only the outpatient labs on a given date of service; or
- A hospital conducts outpatient lab tests that are clinically unrelated to other hospital outpatient services furnished the same day. “Unrelated” means the laboratory test is ordered by a different practitioner than the practitioner who ordered the other hospital outpatient services, for a different diagnosis.
- Under the CY 2014 OPPS final rule, it is optional for OPPS hospitals to seek separate payment under the CLFS for a given outpatient lab test. To minimize administrative burden, OPPS hospitals are not required to distinguish related and unrelated outpatient lab tests and may bill “unrelated” outpatient labs on the 013X TOB prior to July 1, 2014, or on the 013X TOB without the new modifier on or after July 1, 2014, to receive packaged payment under the OPPS.
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